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Migration and social insurance

  • Helmuth Cremer

    ()

    (Toulouse School of Economics)

  • Catarina Goulão

    ()

    (Toulouse School of Economics)

In Europe there are countries whose welfare system is more in the tradition of Beveridge (based on universal flat benefits) and others whose system is mainly Bismarkian (based on benefits related to past contributions).Labor mobility across different countries raises concerns about the sustainability of the most generous and redistributive insurance systems. We address the sustainability of more redistributive insurance systems in a context of labor mobility. In a two/countries seting We find out that a Bismarkian insurance policy is never affected by migration but that the Beveridgean one is. Moreover, our results suggest that the race-to-the-bottom affecting tax rates may be more important under Beveridge-Beveridge competition than under Beveridge-Bismarck competition .Additionally, Bismarkian governments may find it beneficially to adopt a Beveridgean policy.

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Paper provided by Institut d'Economia de Barcelona (IEB) in its series Working Papers with number 2010/53.

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Length: 28 pages
Date of creation: 2010
Date of revision:
Handle: RePEc:ieb:wpaper:2010/11/doc2010-53
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  1. Leite-Monteiro, Manuel, 1997. "Redistributive policy with labour mobility across countries," Journal of Public Economics, Elsevier, vol. 65(2), pages 229-244, August.
  2. Panu Poutvaara, 2005. "Social Security Incentives, Human Capital Investment and Mobility of Labor," CESifo Working Paper Series 1544, CESifo Group Munich.
  3. Cremer, H. & Pestieau, P., 2001. "Social insurance competition between Bismarck and Beveridge," CORE Discussion Papers 2001031, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  4. Cremer, Helmuth & Pestieau, Pierre, 1998. "Social insurance, majority voting and labor mobility," Journal of Public Economics, Elsevier, vol. 68(3), pages 397-420, June.
  5. Sinn, Hans-Werner, 1990. "Tax harmonization and tax competition in Europe," Munich Reprints in Economics 19846, University of Munich, Department of Economics.
  6. Stéphane Rossignol & Emmanuelle Taugourdeau, 2006. "Asymmetric social protection systems with migration," Journal of Population Economics, Springer, vol. 19(3), pages 481-505, July.
  7. Lejour, Arjan M & Verbon, Harrie A A, 1994. " Labour Mobility and Decision Making on Social Insurance in an Integrated Market," Public Choice, Springer, vol. 79(1-2), pages 161-85, April.
  8. Hindriks, Jean, 1999. "The consequences of labour mobility for redistribution: tax vs. transfer competition," Journal of Public Economics, Elsevier, vol. 74(2), pages 215-234, November.
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